BrandsGenerations Roper 12 08

GfK Custom Research GfK Roper Reports® US POV – Brands & Generations December 2008
Brands and Generations

GfK Roper Reports® US Point of View Report
December 4, 2008
© Copyright GfK Roper Consulting 2008. Proprietary and Confidential

GfK Custom Research GfK Roper Reports® US POV – Brands and Generations December 2008
Introduction
2
There is a longstanding notion that the older people are, the more brand loyal they
are
• This suggests that the aging Baby Boom offers lots of potential for a large and
loyal customer base, even as the upcoming Gen Y/Millennials exhibit youthful
fickleness
Marketers want to maximize brand loyalty for several reasons:

• Customers who keep coming back are more profitable
• In a best-case scenario, they are also brand advocates who spread positive
word-of-mouth
• They may also provide a readymade test market for brand extensions
So what is the truth about brand loyalty and generations?
This report explores consumer attitudes measured in Roper Reports® US surveys

between 1997 and 2008 in an effort to uncover general and generational patterns

Contents
3
1 Measuring Brand Loyalty
2 Obstacles to Loyalty and How to Hurdle Them
3 Loyalty and Generations
4 Summary/Implications
A Appendix: Generational Definitions and Profiles

1 Measuring Brand Loyalty

Measuring Brand Loyalty

5
People’s attitudes toward brands derive from two key types of motivations:
Comfort – past experience, growing up with a brand, resistance to change
Convenience – ease of buying same thing again and again, lack of time to
do research

Tried-and-True Mentality Reaches Majority Status – Barely

6
“Once I find a brand I’m satisfied with, I don’t experiment with new ones”
Completely disagree Completely agree
% of online adults 18+ who agree/disagree with statement
4 17 27 40 12
52% agree
“All that gimmicky packaging makes no difference to
me because I normally stick to the brands/products I'm
familiar with anyway.” (male, 30s)
RRUS 08-1, QC1 (online panel); TrendWhys May 2007

(online bulletin board) © Copyright GfK Roper Consulting 2008. Proprietary and Confidential
More Go with What’s Familiar than Don’t

7
“I buy the brands I grew up with ”

6 18 37 33 6
24% disagree 39% agree

“I do not worry about design
when it comes to personal care,
just the brand names I trust.”
(female, 20’s)
RRUS 08-1, QC1 (online panel); TrendWhys May

2007 (oinline bulletin board) © Copyright GfK Roper Consulting 2008. Proprietary and Confidential
Yet Shoppers “Play the Field” – Particularly with Clothing,

Electronics and Food
8
“I usually buy the same brand”

% of adults 18+ who agree with statement
Beverages 48
Health and beauty aids 38
Automobiles 38
Household cleaning products 35
Food 28
Electronics 21
Clothing 12
RRUS 7/06, Q7
Relatively Few Admit to Spurious (Convenient) Loyalty

9
“I don’t have time to research different brands, so I tend to buy the same ones”

14 28 35 18 5
23% agree
RRUS 08-1, QC1 (online panel)

And Even Fewer Say They’re Unwilling to Try Something New

10
“I am not willing to try new brands”

Automobiles 28
Alcoholic beverages 16
Large/small
13
household appliances
Personal care
9
products
Electronics/technology
8
products
Food and non-
5
alcoholic beverages
Everyday household 4
products
RRUS 11/07, Q15a

Overall, the Scale Is in Balance

11
Loyal attitudes Disloyal attitudes
52
42
39 40
31 32
23 24
21
12
Stick with Buy brands Usually buy Buy same Unwilling Don't stick Don't buy Usually buy Disagree Very
brand that grew up same brand to try new with brand brands whatever buy same willing to
satisfies with brand* because brands* that grew up brand is brands try new
don't have satisfies with best deal* owing to brands*
time to lack of
research research
time
* Average across 7 categories
RRUS 08-1, QC1; RRUS 11/07, Q14, 15a(online panels);
RRUS 7/06, Q7 (telephone) © Copyright GfK Roper Consulting 2008. Proprietary and Confidential
Loyalty Generation Scorecard

12
Gen Y and Pre-Boomers exhibit brand loyalty in different areas
Gen Y Gen X Boom Pre-Boom
Stick with brands that

50% 51% 51% 58%
satisfy
Buy brands grew up with 47 42 37 31
Usually buy same brand* 28 32 30 38
Buy same brand because

don’t have time to 34 29 17 16
research
Not willing to try new
14 11 11 16
brands
* Average across 7 categories

RRUS 08-1, QC1; RRUS 11/07, Q14, 15a(online panels);
RRUS 7/06, Q7 (telephone) © Copyright GfK Roper Consulting 2008. Proprietary and Confidential
Less Generational Variation Today on Sticking with Familiar

13
“Once I find a brand I’m satisfied with, I usually don’t experiment”*

Total
72 Gen Y
67 Gen X
66 Baby-boomers
60 Pre-boomers
58
52 50 51 51
1997 (In-person) 2008 (Online)

* top-4 on 10-point scale for 1997; top-2 on 5-point scale in 2008
RRUS 97-3, Q38 (in-person); RRUS 08-1, QC1 (online panel)
14
2 Obstacles to Loyalty and How to Hurdle Them

Obstacles to Loyalty
15
Price – Shoppers bent on good deals are often brand-blind
Curiosity – Some try new things out of novelty, others because they’re still
looking for the “right one”
Indifference – Consumers who don’t see differences among brands are

unlikely to develop loyalties
Influence – People are open to suggestion, which could lead them away
from your brand

Price Obstacle: Most Are Deal-Oriented, Especially Gen X

16
77% agree they always buy things on sale
81
77
74 73 “I'm not into brands but quality
and prices. I usually buy what’s on
sale and almost NEVER pay retail.
I find it shopping ignorant to not
at least try and find the best deal
for my money, but of course I
don't have money to burn.”
(female, 40s)
Gen Y Gen X Baby Pre-
boomers boomers
RRUS 08-1, QC1 (online panel); TrendWhys

May 2007 (online bulletin board)
Sale Mentality Has Changed Generational Gears

17
“I always try to buy things on sale”*

Total
Gen Y 81
Gen X
Baby-boomers
Pre-boomers 77 77
74
73
72
71 71
69

Hurdling the Price Barrier: Be on the Right Side of a Trade-off

18
26% of those who ever buy store brands say it’s because “I like to save
money on some kinds of products so I can spend more on others where the
name brand really matters to me”
28 28
“I really don't have any brands
that I buy regularly. I tend to
23
20 buy what's on sale as long as
it's fairly good quality. My son
will only wear Old Navy shirts,
because they are softer and
more comfortable for him.”
(female, 40s)
boomers boomers
RRUS 11/07, Q15c (online panel); TrendWhys

May 2007 (online bulletin board) © Copyright GfK Roper Consulting 2008. Proprietary and Confidential
Curiosity Obstacle: Constantly Seeking Something

19
35% agree they like to try newest/latest versions of products
I'm all over the board on

48
43 brands I buy. Although I do
30
tend to navigate to some
20 brands over others, nothing
is set in stone for me. For
example, I can buy a can of
Gen Y Gen X Baby Pre- peas for fifty cents on sale
boomers boomers one week, the next I can
splurge and get fresh peas
for five dollars at the road
“I have probably 8 different brands of shampoo side vegetable stand. (male,
and conditioner. I'm always trying to find the 30s)
perfect one.” (female, 30s)
RRUS 08-1, QC1 (online panel); TrendWhys

May 2007 (online bulletin board)
Older Adults Still Least Interested in Trying New Products

20
“I like to buy the newest/latest versions of products.”*

Total
Gen Y % of adults 18+ who agree with statement
Gen X
Baby-boomers 48
Pre-boomers
42 43
35 35
32
30
24
20

Hurdling the Curiosity Barrier: Keeping It in “the Family”

21
19% say that the one thing that would most encourage them to try something
new would be if they “already use products of the same brand/made by the same
company”
32
Brand extensions are a
20 sensible way to encourage
16 16 experimentation and loyalty
at the same time, especially
among Pre-Boomers

boomers boomers
RRUS 11/07, Q14 (online panel) © Copyright GfK Roper Consulting 2008. Proprietary and Confidential
Indifference Obstacle: Just 3 in 10 See Packaged Goods Differences

Worth Paying for
22
Consumers are evenly divided on their attitudes toward differences
between packaged goods brands*, and generational differences are slight
Differences No
worth difference,
paying more so not
for, 30 worth
paying
(32% for Boom) more, 35
This average is down (38% for Gen Y)

from 35% in 1998*
Don’t blame Gen Y,
though – Pre-Boomers’ Differences,
premium perception but not
has dropped 6 points worth
paying for,
on average across 22 (33% for Gen Y)
32
comparable categories
* Average across 37 packaged goods categories measured in 2006 and 30 in 1998

RRUS 06-3, Q85 (in-person) © Copyright GfK Roper Consulting 2008. Proprietary and Confidential
Premium Perception Also Mixed for Financial Services

23
4 in 10 consumers can see differences among financial services but not
their value*, and generational differences are slight
Differences No
worth difference,
paying more so not
for, 27 worth
paying
(28% for Gen X and Y) more, 35
(37% for Pre-Boom)
Differences,
but not
(41% for Boom) worth
paying for,
39
* Average across 8 product categories measured

RRUS 06-1, Q80 (in-person) © Copyright GfK Roper Consulting 2008. Proprietary and Confidential
Premium Perception Far Higher for Household Products

24
Many consumers think certain brands of stoves, mattresses, and the like
are worth more*, Boomers in particular
No
difference,
so not
worth
paying
more, 19
Differences
worth
paying more
for, 43
Differences,
(46% for Boom) but not
worth
paying for,
29
(33% for Pre-Boom)
* Average across 15 product categories measured

RRUS 08-1, QE10 (online panel) © Copyright GfK Roper Consulting 2008. Proprietary and Confidential
Hurdling the Indifference Barrier: Commanding Premium

25
It’s easier to gain loyalty if consumers can tell the difference between your
brand and others
It’s even better if they think your brand is distinctive enough to command a
premium price
Old fashioned, dependable, and

sturdy. I believe that overall the GE
brand of products is exactly this and
it’s how I am too. (male, 40s)
RRUS TrendWhys May 2007 (online bulletin board)

Influence Obstacle: Virtually Everyone Is Prone to Suggestion

26
Just 11% of adults say nothing influences them to try a new product; the
others say they’re most influenced by:
Lower introductory
31
price/coupon
Already use products of

19
the same brand
Buzz/Recommendations
17
of others
Reputation of the
17
brand
Engaging
5
advertisements
RRUS 11/07, Q14

Hurdling the Influence Barrier: Provide the Influence

27
% of online adults who say
that what most influences Gen Y Gen X Baby Boom Pre-Boom
them to try a new product is:
Lower introductory
17% 33% 36% 32%
price/coupon
You already use products

16 16 20 32
of the same brand
Reputation of the brand 17 13 18 22
Buzz/Recommendations
24 22 13 10
of others
Engaging advertisements 10 5 5 3
Target your methods to generational preferences:

• Lower prices and coupons are key purchase influencers for Boomers
• Reputation and past experience influences Pre-boomers
• Buzz and WOM influence Gen Y most
RRUS 11/07, Q14

28
3 Loyalty and Generations

Generational Brand Attitudes

Gen Y: Tenuous Loyalty
29
Nearly half agree of Gen Y agrees they buy the brands they grew up with versus
31% of Pre-Boomers
• This is probably because many of those brands are still around, so the effect
may fade as Gen Y gets older and they see more brands come and go
One-third of Gen Y tends to buy the same brands because they don’t have time to
do research, more than twice the 16% share of Pre-Boomers
• This may also be a life-stage effect, but even so, it probably won’t wane for a
long time as Gen Y become parents and their lives get even busier
Nearly half of Gen Y likes to try the newest/latest version of products, more than
twice the 20% share of Pre-Boomers
• This generation is still experimenting with life in general
Bottom Line: Members of Gen Y are not as fickle as stereotype suggests, yet they
will face many changes in their lives that will continue to shape their brand attitudes


Gen X: Deliberate Loyalty
30
Gen X shares with Gen Y a greater-than-average tendency to say they buy the same
brands because they don’t have time to do research; and they are slightly more
likely than Gen X to say they usually buy the same brand across 7 categories
• These are busy parents
They are even more likely than average to say they always try to buy on sale
• These are parents on a budget
They are almost as likely as Gen Y to say they like to try the newest/latest products
• These are young adults just approaching their 40s; they are still trying things
out
Bottom Line: For Gen X, life is a balancing act, which means they are weighing
brand decisions carefully and making trade-offs in the process


Boomers: Maturing Loyalty
31
Boomers are less likely than younger adults to say they buy the brands they grew up
with
• Probably because some of these brands have gone by the wayside, but also
because they’re not necessarily in the market for the same products that they
used to be
Boomers are notably less likely than younger adults to say they buy the same brands
owing to lack of research time
• This may be because they have a little more time than they did when their nests
were full, but also because they better understand the value of a well-
considered purchase decision
Bottom Line: Boomers are still such a large group that their attitudes often mirror
national norms. Yet they are definitely showing their age in some brand attitudes
that align more with their parents’ perspective than their children’s.


Pre-Boomers: Conditional Loyalty
32
58% of Pre-Boomers agree they stick with brands that satisfy them and 36% usually
buy the same brands, higher than for other generations
They are least likely to be interested in trying the newest/latest things

• They’ve been around the block a few times and aren’t easily impressed by sheer
novelty
But they are less likely than average to say they stick with brands simply because
they don’t have time to do research
• This implies that they are willing to put effort into a decision that may well mean
making a brand switch
Bottom Line: Pre-Boomers appear to exhibit the greatest brand loyalty, but this
appearance is belied by their willingness to entertain a change – not for the sake of
change or novelty, but because it’s the sensible thing to do

33
4 Conclusions/Implications: Getting and Keeping the Love

Conclusions/Implications
34
Overall, consumers exhibit a balance between loyal and anti-loyal brand attitudes,
and no one generation is clearly more loyal than any other
• This means that marketers face similar obstacles and opportunities across the
board. Loyalty cannot be assumed just because your target is a particular
demographic group.
Despite a general balance, generations exhibit subtle differences in their attitudes

• Gen Y tends to be more experimental but also sticks with the brands it grew up
with
• Marketers can try new things with young adults but should not do so at the
expense of doing away with the old
• Pre-Boomers are less experimental in terms of making change for change’s
sake, but if something’s not working anymore, they will not remain blindly loyal
• Marketers have to be continually vigilant to maintain loyalty among older
adults
In sum, brands can never rest on their laurels – they must continually earn the
loyalty of both new and old customers

For More Information

35
The findings in this report are drawn from a variety of GfK Roper Reports US and
Worldwide surveys conducted using various methodologies, including telephone
and online
Online studies are fielded among an online panel and weighted to reflect the
demographic characteristics of the online population as measured by Roper
Report US in-person studies and MRI
For more information, please contact your GfK Roper Reports service
representative or go to www.gfkamerica.com

36
A Appendix: Generational Definitions and Profiles

Why Focus on Generations?

Because They’re All Sizeable Markets in Distinct Life Stages
37
Gen Y Gen X Boom Pre-Boom
Age 14-27 Age 28-43 Age 44-62 Age 63+
1981-94 1965-80 1946-64 Pre-1946
5
Millions
of people 4.5
4
3.5 66 million 44 million

3 22% of pop. 14% of pop.
60 million `
76 million `
2.5
20% of US 25% of pop.
2 population
1.5
1
Gen Y
0.5 in RR*
0
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70
Age in years
*Note: Data on Gen Y in the current study are based on Americans
aged 18-27 unless otherwise noted
US Census Bureau 2008 projections © Copyright GfK Roper Consulting 2008. Proprietary and Confidential
Generational Identities
Gen Y
38
Generation Y
Date of birth: 1981-94
Current age: 14-27
Current size: 60 million
Members: Norah Jones, Britney Spears, Lindsay Lohan, John Mayer, Mark
Zuckerberg (Facebook), Michael Phelps
The Always-On Generation - Leading the Buzz Revolution

Defining generational moments:
September 11, 2001, terrorist attacks; Columbine shootings
Generational attributes:
Experience-oriented - feel it all
“The best way to rebel is for me to dress formally all the time, be
honest, respect my elders, love my country and drive a used
Toyota, instead of the prerequisite SUV or suitable car for the
under-35 bracket.”
Chris Lyod, 17

Gen X
39
Generation X
Date of birth: 1965-80
Current age: 28-43
Members: Hugh Jackman, Angelina Jolie, Tiger Woods, Larry Page and Sergy
Brin (founders of Google), Patrick McHenry (youngest member of US
Congress)
Once Called Slackers - Led The Dot.com Revolution

End of Cold War (fall of Berlin Wall), AIDS, MTV, the Internet
Savvy, sanguine, pragmatic, focus on family
“It’s not Generation X - It’s Generation Y (Why): Why the hell

should I buy your product?
Sergio Zyman,
Former Chief Marketing Officer,
Coca-Cola Company

Boomers
40
Boomers
Date of birth:1946-64
Current age: 44-62
Members: Barack Obama, Hillary Clinton, Oprah Winfrey, Madonna,
Johnny Depp, Bill Gates, Jeff Bezos
Sense of Entitlement - Me First

Vietnam, Woodstock, Civil Rights Movement, Women's Movement
(including Roe v Wade)
Achievement-oriented - have it all
“The problem with instant gratification is that it takes too long”
“I am what I do”
“The kid with the most toys wins”

Pre-Boomers
41
Pre-Boomers
Date of birth: 1945 and earlier
Current age: 63 and older
Members: Barbara Bush, Nancy Reagan, Madelyn Kahn, Olympia
Dukakis, Clint Eastwood, Robert Redford
Sense of Duty
Depression, World Wars, New Deal, TV, post-war prosperity
Safety and security – the rise of the US as a superpower
Conservative and thrift-oriented, loyal, industrial
Believe in institutional authority – church, government,
corporations
“I do what I’m told.”

“Don’t throw it away.”

BrandsGenerations Roper 12 08

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GfK Custom Research GfK Roper Reports® US POV – Brands & Generations December 2008

Brands and Generations

© Copyright GfK Roper Consulting 2008. Proprietary and Confidential

Marketers want to maximize brand loyalty for several reasons:

So what is the truth about brand loyalty and generations?

This report explores consumer attitudes measured in Roper Reports® US surveys

© Copyright GfK Roper Consulting 2008. Proprietary and Confidential

1 Measuring Brand Loyalty

2 Obstacles to Loyalty and How to Hurdle Them

3 Loyalty and Generations

A Appendix: Generational Definitions and Profiles

© Copyright GfK Roper Consulting 2008. Proprietary and Confidential

1 Measuring Brand Loyalty

© Copyright GfK Roper Consulting 2008. Proprietary and Confidential

Measuring Brand Loyalty

Comfort – past experience, growing up with a brand, resistance to change

© Copyright GfK Roper Consulting 2008. Proprietary and Confidential

Tried-and-True Mentality Reaches Majority Status – Barely

RRUS 08-1, QC1 (online panel); TrendWhys May 2007

More Go with What’s Familiar than Don’t

“I buy the brands I grew up with ”

24% disagree 39% agree

RRUS 08-1, QC1 (online panel); TrendWhys May

Yet Shoppers “Play the Field” – Particularly with Clothing,

“I usually buy the same brand”

Health and beauty aids 38

Household cleaning products 35

Relatively Few Admit to Spurious (Convenient) Loyalty

Completely disagree Completely agree

RRUS 08-1, QC1 (online panel)

And Even Fewer Say They’re Unwilling to Try Something New

“I am not willing to try new brands”

RRUS 11/07, Q15a

Overall, the Scale Is in Balance

Loyalty Generation Scorecard

Gen Y and Pre-Boomers exhibit brand loyalty in different areas

Gen Y Gen X Boom Pre-Boom

Stick with brands that

Buy brands grew up with 47 42 37 31

Usually buy same brand* 28 32 30 38

Buy same brand because

* Average across 7 categories

Less Generational Variation Today on Sticking with Familiar

“Once I find a brand I’m satisfied with, I usually don’t experiment”*

1997 (In-person) 2008 (Online)

2 Obstacles to Loyalty and How to Hurdle Them

© Copyright GfK Roper Consulting 2008. Proprietary and Confidential

Price – Shoppers bent on good deals are often brand-blind

Indifference – Consumers who don’t see differences among brands are

© Copyright GfK Roper Consulting 2008. Proprietary and Confidential

Price Obstacle: Most Are Deal-Oriented, Especially Gen X

77% agree they always buy things on sale

RRUS 08-1, QC1 (online panel); TrendWhys

Sale Mentality Has Changed Generational Gears

“I always try to buy things on sale”*

% of adults 18+ who agree with statement

1997 (In-person) 2008 (Online)

* top-4 on 10-point scale for 1997; top-2 on 5-point scale in 2008

Hurdling the Price Barrier: Be on the Right Side of a Trade-off

RRUS 11/07, Q15c (online panel); TrendWhys

Curiosity Obstacle: Constantly Seeking Something

35% agree they like to try newest/latest versions of products